SINGAPORE PUBLIC HOUSING AFFORDABILITY FOR NEWLYWED COUPLES: PAST VS PRESENT

Abstract

In Singapore, among many other countries, housing affordability of new flats has been a major concern these few years. In the eyes of potential new Build-To-Order (BTO) and Resaleflats buyers in Singapore, the rising housing costs and sluggish GDP growth has seen an incoherent relationship between the property prices and the income level. For that reason, the goal of this present study is to examine the housing affordability trend for newlywed couples over the years of1999 to 2014 by utilizing the Debt Service Ratio (DSR) and Housing Price-to-Income Ratio (HPI) in the research methodology. In the first part, the study will analyze the affordability levels of 2 groups of newlywed couples; Degree and Diploma Holders, both with a monthly income of less than S$10,000, who meet the criteria for purchasing new and resale HDB flats. The results show that the housing affordability levels of both groups of household have seen a decline over the years. The DSR is analyzed to have increased beyond the international benchmark of 30%, while the HPI is analyzed to have increased over the past 15 years above the benchmark of 5. In the second part, the study explores the possible reasons that attributed to the declining housing affordability rate. The study will also discuss implications of the trend. The report will then provide recommendations for the Singapore government to help increase these groups of households' housing affordability. In conclusion, though the housing affordability is on a decline, the concepts of DSR and HPI as the main catalysts for this research will not justify and establish a precedent for the housing affordability outlook. After all, the amount of housing loans and debts to be incurred is a form of choice made by homebuyers.